Greek Prime Minister George Papandreou has struck a deal with ministers to step down and hand power to a negotiated coalition government if they help him win a confidence vote on Friday, government sources with knowledge of a cabinet meeting said.

They said the ministers involved in the deal were led by Finance Minister Evangelos Venizelos.

"He was told that he must leave calmy in order to save his party," one source told Reuters on condition of anonymity. "He agreed to step down. It was very civilized, with no acrimony.

Overall, we see two possible solutions. First, it is possible that the IMF could increase the firing power of the EFSF by providing funds directly to the EFSF or its possible SPV offshoots. However, it is questionable to what degree this is consistent with the IMF's current mandate, which allows lending only to individual countries. The purchase of bonds in the secondary market would be completely new territory for the IMF and would also probably require a change in the IMF charter.

Second, the IMF could use some of its existing facilities. In particular, the IMF's relatively new Precautionary Credit Line (PCL) could be relevant for countries such as Italy and Spain. The purpose of the PCL is primarily to improve a country's liquidity position to protect the country from contagion in connection with systemic shocks in global financial markets. This is a drawing right that countries prequalify for but when a country has prequalified this drawing right can be used unconditionally (duration is one ot two years). The size of the drawing right depends on a country's quota in the IMF (500-1000% of quota). Under existing rules, Italy could get EUR45-90bn and Spain EUR23-46bn, according to our calculations. However, an important question of course remains whether Italy and Spain will actually be able to prequalify for access to the PCL.

However, should Italy and Spain (and possibly other countries) draw on this, it would probably be necessary to increase the IMF's resources. The IMF's free resources are currently estimated to be about USD391bn. China, Japan and Russia have expressed a willingness to contribute to boosting the IMF's resources. Remarkably, the US has been more reluctant to support increasing the IMF's resources, partly because it fears it will be intertwined with current discussions about voting power within the IMF.

RBS has reported third-quarter results and also put a figure on the losses it expects to take on Greek debt.RBS marked down its holding of Greek sovereign debt to 37% of par value, ie 63% loss, as of Sept 31German bank Commerzbank has plunged into the red in the third quarter and abandoned its full year profit targets, after taking a €798m (£689m) impairment on Greek assets.

13.13: BREAKING NEWS Sarkozy is on his feet delivering the decisions of the G20 summit in Cannes

Situation “more complex” than 2009 There’s not a single number to this problem [eurzone crisis] 11 countries fingered as “tax havens” “We do not want to have any more tax havens in the world” “The countries that go on being tax havens … will be excluded from the international community” Finance ministers will work out how to boost resources of IMF at February meeting Welcomes Italy’s agreement to submit to regular outside monitoring On financial transactions tax ideas – financial institutions that have led the world into crisis should pay towards repairing damage “France will fight for that tax [on financial transactions] to become a reality”

Mr Sarkozy did not have much in the way of concrete achievements to proclaim at his closing press conference, but he did make a big deal of getting a mention – albeit a passing reference – to a financial transaction tax into the communique, which acknowledges as an initiative being taken by ‘some countries’.

The US and UK are flatly opposed to an FTT (a big bee in the French bonnet) but it is now backed by the European Commission and Sarko reeled of a list of others he said now supported it: Argentina, the African Union, Ethiopia, South Africa, the secretary general of the UN and Brazil.